New Official Calculations Make Brazil World’s Tenth Largest Economy

Brazilian train in São Paulo state interior Brazil ranks as the world's tenth economy, ahead of South Korea, Holland and Australia, according to a GDP new calculation system announced by the government and which a majority of Brazilians economists consider more in line with reality.

With the modified system, the Brazilian economy growth rate in past four years has experienced an encouraging extra increase. In 2002 real increase was 2.7% (1.9%); in 2003, 1.1% (0.5%); in 2004 5.7% (4.9%) and in 2005, 2.9% (2.3%).

Brazil's GDP in 2005 reached US$ 882.130 billion (at the exchange rate to the time) which means the country climbed from position 11 to 10 in the world's country economy ranking, according to Austin Rating consultants.

This in practical terms means that in 2005 the Brazilian economy, placed in position 11, was larger than South Korea's position 10, ahead of Holland and Australia even in 2003 and 2004.

However the methodological reform has had to live with a certain degree of suspicion since growth rates from 2003 to 2005, the first three years of the Lula da Silva administration, were considerably significant and not so much those between 2000 and 2002, the last three years of former president Fernando Henrique Cardoso (1995/2002).

According to the reformed calculation system, in 2000 the Brazilian economy expanded 4.3% just below the original 4.4%, while in 2001 the previous and reformed systems coincided in 1.3%.

"The good news is that GDP was growing above original estimates and now we have a more precise calculation," said Finance Minister Guido Mantega.

Mantega believes that with the new criteria, growth of the Brazilian economy in 2006 could be in the range of 3.3 to 3.6%, well above the 2.9% officially released last week based on the former criteria.

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